Room at the Top?

By RON STODGHILL

Published: November 1, 2007

CORRECTION APPENDED

The executives are a study in contrasts. One is a brash risk-taker who bootstrapped his way from an Alabama cotton farm to one of Wall Street's largest brokerage firms. The other made his mark as a consensus builder who leveraged ties to one of America's most powerful families to eventually lead the world's largest media company.

E. Stanley O'Neal, 56, at Merrill Lynch and Richard D. Parsons, 59, at Time Warner, have nevertheless inhabited the public imagination as two executives who helped rewrite history by breaking down cultural barriers and rising to lead Fortune 500 companies.

But Mr. O'Neal retired under pressure this week after an unauthorized merger approach to a rival bank and an $8.4 billion write-down that resulted in an overall loss of $2.3 billion for the quarter. And Mr. Parsons has announced that he planned to retire by March at the latest. He has been under pressure to turn the reins over to Time Warner's president, Jeffrey L. Bewkes, whom analysts say is likely to accelerate a shake-up by spinning off business units like AOL and Time Warner Cable.

Along with ruminations on their legacies, their situations have led to a debate over whether their accomplishments have helped break down barriers facing a younger generation of black executives angling for the corner office. Industry observers and civil rights leaders say Mr. O'Neal's ouster has shed much-needed light on the dearth of African-Americans in so-called C-level positions in corporations, while underscoring the extent to which executive suites and boardrooms remain white male bastions.

The subject of race has proven to be delicate for African-American executives, many of whom prefer to view themselves as -- at least publicly -- an ''an executive who happens to be black.'' They have earned the right through hard work, they say, to be judged on their merits.

''We have demonstrated that we can not only run companies and in many cases, run them quite well,'' says Marc Morial, president of the National Urban League, a nonprofit civil rights organization. ''There is an abundance of African-American talent out there. My hope is that they will get their chance to rise up and pick up the mantle.''

The chief executive of StarCom, Renatta McCann, said, ''The victories of leaders like Stanley O'Neal and Richard Parsons are both symbolic and transformational.''

That said, she added. ''we have yet to reach a tipping point where the pipeline organically regenerates. We have to achieve momentum and velocity, and it has to achieve scale to make it sustainable.''

While some critics this week raised questions of race in Mr. O'Neal's ouster, analysts and those with knowledge of Merrill's actions, say that was not the case.

Mr. O'Neal was judged, they said, by the same standards of others in his position -- the company's performance and his relationship to the board.

Mr. O'Neal could not be reached for comment.

A spokesman for Merrill, Jason H. Wright, said: ''During the years Stan was here, as an organization we very much embraced a meritocracy and inclusiveness that has translated into a more diverse work force that we're proud of. The board has been very engaged in those initiatives and has no intention of changing, regardless of who is C.E.O.''

Alfred Edmond Jr., editor in chief of Black Enterprise magazine, said, ''One of the biggest lessons is that being C.E.O. doesn't make you bulletproof.''

''First we had to learn what it takes to get into that top spot,'' Mr. Edmond said, ''and now we're learning what it's like to live in it.''

As evidence, he pointed to Franklin D. Raines, who led Fannie Mae, the mortgage buyer, for six years before stepping down in December 2004 amid an accounting scandal, and Ann M. Fudge, who resigned in 2005 for personal reasons as chief executive of Young and Rubicam Advertising after the agency failed to keep several key accounts.

''Corporate performance will be the sword that you live and die by,'' Mr. Edmond says.

''I know who I am when I go to bed, and who I am when I wake up,'' Mr. Thompson of McDonald's said. ''I've never run away from a conversation when somebody asks what it's like to be an African-American executive.''

But he added that he expects to be judged by his performance.

Beyond such visible exceptions as Mr. O'Neal and Mr. Parsons, some corporate diversity specialists say that in recent years, African-Americans have gradually lost ground to other minorities.

''When Carleton Fiorina left H. P., people said it was a rough time for women in the executive suite, but women in corporate America seem to be doing a lot better these days than African-Americans,'' said Frank Dobbin, a professor of sociology at Harvard who studies corporate diversity. ''Forty years after the Civil Rights Acts were passed, we're much further behind than we should be.''

Correction: November 2, 2007, Friday
Because of an editing error, an article in Business Day yesterday about African-American executives misstated the employment plans of Time Warner's chief executive, Richard D. Parsons. Mr. Parsons's contract with Time Warner expires in May; he has not announced plans to retire in March.